Hedge Funds Q2 2012 Performance

Hedge Funds Q2 2012 Performance

Hedge Funds Fall but Beat Major Indexes in Q2 2012

Hedge funds did not do extraordinarily well last quarter but they did manage to beat the S&P 500 and Nasdaq indexes--a feat that was not accomplished in the first quarter, as the S&P outperformed most hedge funds then. According to the HFR Global Hedge Fund Industry Report, the HFRI Fund Weighted Composite Index, which is comprised of 2,200 hedge funds with at least $50 million AUM, fell 2.7% in Q2.

Not even the most savvy fund managers are immune to global uncertainties. Last week, John Paulson told his clients that his Advantage Plus fund slid 8% while his gold fund edged down 0.7% in June, according to media reports.

Paulson is reportedly betting against Europe, where a series of bailouts for now has managed to prevent a further deterioration in the situation.Total industry capital also dropped 1.3% at $2.10 trillion from $2.13 trillion, underscoring hedge funds’ weak performance in the quarter.

Investors continued to focus on strategies with limited exposure to global equity markets and allocated $4.1 billion in net new capital to hedge funds during the quarter, bringing net inflows in the first half of the year to more than $20 billion, HFR said. Source

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